Could someone tell me what's wrong here?! I've checked all the directories and there's installed everything in usr/local/lsws and out in the root 4.1.12 directory... or is this wrong way to do it security reasons?

NiteWave I just copied and pasted everything in the XML file liked you told me from FileZilla into Notepad++ only changed by domain name as I don't want this public security reason public forum... I can download it again if you wish? Not sure what you mean by "- "

the error
2012-04-07 07:07:06.986 [ERROR] [/usr/local/lsws/conf/httpd_config.xml:4] not well-formed (invalid token)
is because in line 4:
<adminEmails>xxxxxx^[</adminEmails>
after delete ^[, i.e., change to
<adminEmails>xxxxxx</adminEmails>
all becomes ok.